[53], Applying for a PPP loan is free to the applicant. [188][189], The Small Business Administration estimated that 42,000 for-profit entities and 10,000 non-profit organizations would receive questionnaires. The federal Paycheck Protection Program (PPP) reopens this month with an additional $284 billion that entrepreneurs can borrow to help keep their businesses afloat. [116], Rep. Nita Lowey (D–NY) introduced the Heroes Act, which would extend the period that PPP loans can be made from June 30 to December 31, 2020. Twenty-four weeks after the funds are disbursed, you can apply for forgiveness. This page was last edited on 10 March 2021, at 15:04. [40], PPP loan proceeds may also be used for certain non-payroll costs. [12][85], If the PPP loan was made before June 5, 2020 and the borrower chooses to use an 8-week covered period, then the maximum amount of loan forgiveness for compensation for self-employed individuals and owner-employees is equal to the lesser of 15.38% of their 2019 compensation or $15,385 per individual in total across all businesses. [135] Eight days later, the Small Business Administration and the Department of the Treasury said that it would release the names, addresses, and other information about recipients of PPP loans exceeding $150,000 each. [12], Applicants must make certain assertions, including that "current economic uncertainty makes this loan request necessary to support the ongoing operations of the applicant". Affiliation rules are waived for businesses in the hotel and food services industries, franchises in the Small Business Administration's Franchise Directory, and businesses that receive financial assistance from small business investment companies licensed by the Small Business Administration. And if you have more than one location, there may not be more than 300 employees at each location. [129], On December 21, 2020, the House and the Senate passed the Consolidated Appropriations Act, 2021, which includes $284 billion in forgivable loans to small businesses via the Paycheck Protection Program. [133][92], The Act expanded the definition of allowable payroll costs to employer-sponsored group life insurance benefits, group disability insurance benefits, group vision insurance benefits, and group dental insurance benefits. [98][99], A business may challenge a judge's decision within 10 days of receipt of the judge's initial decision. [7] The deferral of principal and interest payments was extended to the date that loan forgiveness is remitted to the lender or, if the borrower does not apply for loan forgiveness, ten months after the end of the covered period. A business is eligible to use SBA Form 3508S instead if it meets. The business rehired employees by December 31. Self-employed and gig workers who have been waiting for new rules that would mean larger forgivable loans through the Paycheck Protection Program can … Any non-payroll costs that are partially incurred during the covered period may be included in loan forgiveness only for the portion incurred during the covered period and paid by the next regular billing date. Who can apply for a Paycheck Protection Program loan? Businesses with PPP loans of less than $150,000 would be able to attest to compliance with PPP loan regulations in order to receive full loan forgiveness. 3 steps to take after getting a Paycheck Protection Loan. A business will be able to seek reconsideration and appeal of the Small Business Administration's decisions. Carmen Reinicke @csreinicke . Each recipient would be listed with a dollar range of the loan amount. Important updates on the Paycheck Protection Program. The Paycheck Protection Program (PPP) loan is a type of SBA loan designed to provide funds to help small businesses impacted by COVID-19 to keep their workers on payroll. If a business has multiple locations or franchisees, it can still qualify for the Paycheck Protection Program and get a PPP loan, if the specific site seeking a loan has no more than 500 employees, and its NAICS Code begins with 72 (i.e. [151], The Center for Countering Digital Hate identified PPP loans made to the National Vaccine Information Center, to Joseph Mercola's online business group, to the Informed Consent Action Network, as well as to Robert F. Kennedy Jr.'s Children's Health Defense. The loan proceeds may be used to cover payroll costs, rent, interest, and utilities. As of May 31, 2020, businesses had returned more than 170,000 PPP loans, totaling approximately $38.5 billion, largely resulting from many confusing statements and a lack of clarity and confusing information released by the Small Business Administration. The business was unable to rehire its employees on February 15 and was also unable to hire similarly qualified employees by December 31. If the PPP loan forgiveness application was already sent to the Small Business Administration, the lender must request its withdrawal through the Paycheck Protection Platform, correct the error, and then resend. [157][158], Several businesses, including Potbelly, Ruth's Hospitality Group, Shake Shack, Nathan's Famous, and the Los Angeles Lakers, decided to repay the loan proceeds. PPP loan proceeds may generally be used for payroll costs. Paycheck Protection Program loan eligibility. Welcome to Payment Protection Loans, the site that will help you learn and apply for a Paycheck Protection Program loan and get your share of the governmental stimulus for small businesses. [1], A business is not required to begin to pay any principal or interest to the lender until the date that the Small Business Administration disburses the amount of loan forgiveness to the lender. A business may appeal the Small Business Administration's official written decisions regarding PPP loans and PPP loan forgiveness. The Paycheck Protection Program has become a point of interest for virtually every business owner in the United States by now. Knowingly using loan proceeds for unallowable purposes is fraud. After receiving the questionnaire from the lender, the entity has ten business days to complete and return the questionnaire to the lender. Publicly traded businesses and businesses incorporated in, affiliated with, or with certain ties to the People’s Republic of China would not be eligible for a second PPP loan. The name pretty much says it all. A business that pays biweekly or more frequently may choose to use an alternative payroll covered period for payroll costs instead. [167], On May 13, the Small Business Administration said that any business that, together with its affiliates, received a total of less than $2 million of PPP loan proceeds will be assumed to have made the good-faith certification of need in good faith. [112][113] The House of Representatives passed the bill by unanimous consent the following day. [57], Making a false statement to obtain a PPP loan is a crime subject to possible imprisonment, fines, or both. Finally, any business or organization that was still open as of February 15, 2020, is also eligible for Paycheck Protection. Alternatively, the business may elect to calculate the second draw based on the average monthly payroll costs of any 12-month period ending prior to the date of the loan. ", "Government Doubles Interest Rate on SBA Loans After Banks Complain", "SBA and Treasury Issue New Loan Forgiveness Application Form and Guidance for the Paycheck Protection Program Flexibility Act", "Paycheck Protection Program Loans: Three Things The SBA And Banks Need To Agree On Now", "The SBA Releases New PPP Forgiveness Guidance: Interim Final Rule, 'Treatment of Owners and Forgiveness of Certain Nonpayroll Costs, "SBA Changes PPP Loan Rules On August 24 - Hurting Some, Helping Others At Random", "Paycheck Protection Program: Frequently Asked Questions (FAQs) on PPP Loan Forgivenss", "Federal Reserve to backstop Paycheck Protection Program loans", "PPP forgiveness Rules Clarified As First Recipients Face Payments' Exhaustion", "Small Businesses Have 'A Million Questions' About Paycheck Relief Loan as Applications Come Due", "Second Draw PPP Loans: Here's What You Need to Know", "New Forgiveness Flexibility for PPP Borrowers", "SBA and Treasury Issue New Guidance Interpreting the Paycheck Protection Program Flexibility Act", "Paycheck Protection Program Loan Forgiveness Application", "Update: SBA Clarifies PPP Loan Forgiveness Requirements and Loan Review Procedures", "PPP forgivess simplified for loans of $50,000 or less", "SBA Makes Further Changes To PPP Rules In August 4th FAQs", "PPP Loan Forgiveness Application Form 3580S", "Game Changer for SBA PPP $150K Loans — 3508S Forgiveness Application", "Coronavirus Aid, Relief, and Economic Security Act, Section 1106(c)(3)", "Small business owners can now apply for PPP loan forgiveness: Everything to know", "Treasury Issues New FAQs On PPP Loan Forgiveness: What You Need To Know", "Topic No. [50] A PPP loan is a non-recourse loan, unless the loan proceeds are used for unallowable purposes. The borrower would need to employ no more than 300 employees or meet certain alternative size standards. [148] At least 60 churches in Texas received over $1 million each. [126], Senators Marco Rubio (R–FL) and Susan Collins (R–ME) introduced the Continuing Small Business Recovery and Paycheck Protection Program Act on July 27. There are fewer requirements, lenders process and fund … The average number of employees is equal to the average of the number of employees for each payroll between January 1, 2019, and December 31, 2019. [123][124], In June 2020, U.S. [168][169][170], After the riot at the U.S. Capitol on January 6, 2021, it was noted that at least one of the people who had stormed the building had been granted a PPP loan: Richard Barnett had been granted $9,300 on April 14, 2020. A Law Firm’s Perspective on the details of the Paycheck Protection Program; An Accounting Firm’s Perspective on the Paycheck Protection Program ; The SBA Page on the Program; The Full Text of the CARES Act, in case you want to read “from the source” What To Do Immediately. [134], On June 11, Treasury Secretary Steve Mnuchin told the Senate Committee on Small Business and Entrepreneurship that PPP loan recipients' names and loan amounts were confidential and would not be publicly released. Payment is disbursed to the bank within five days that the lender disbursed the loan proceeds to the business. The smallest businesses can still apply for the Paycheck Protection Program. Second-draw applicants can receive the lesser of: Eligibility requirements vary depending on whether or not you received funding in the first round. [4][69] For other PPP loans, the PPP loan has a maturity of two years; each lender has the option to extend the maturity of these PPP loans longer. How do I apply for SBA Paycheck Protection Program (PPP) loan forgiveness? These include life insurance, disability benefits, vision, and dental insurance. ", "Proclamation on Declaring a National Emergency Concerning the Novel Coronavirus Disease (COVID-19) Outbreak", "The Paycheck Protection Program in Action: Questions About Loan Application Risks", "Paycheck Protection Program Loans: Frequently Asked Questions (FAQs)", "Business Loan Program Temporary Changes: Paycheck Protection Program-Eligibility of Certain Electric Cooperatives", "Business Loan Program Temporary Changes: Paycheck Protection Program-Eligibility of Certain Telephone Cooperatives", "Publication 3386: Tax Guide for Veterans' Organizations", "Business Loan Program Temporary Changes: Paycheck Protection Program: Interim Final Rule", "Paycheck Protection Program Loans: Basics for Small Businesses, Sole Proprietorships", "New Paycheck Protection Loan Guidance for Businesses and Lenders", "Updated Business Affiliation Rules: Key Information for Paycheck Protection Program Borrowers", "Frequently Asked Questions Regarding Participation of Faith-based Organizations in the Paycheck Protection Program (PPP) and the Economic Injury Disaster Loan Program (EIDL)", "New PPP Loan Rules Could Give Break To Colleges", "Colleges Get Government Lifeline With New Loan Guidelines", "Paycheck Protection Program Loans Frequently Asked Questions (FAQs)", "Answers to Your Paycheck Protection Program FAQs", "Treasury Guidance Clarifies Key Paycheck Protection Program Questions", "Table of Small Business Size Standards Matched to North American Industry Classification System Codes", "Standard Operating Procedure (SOP) 50 10, Subpart B, Chapter 2", "Apartment Industry Urges SBA, Treasury to Close Paycheck Protection Loophole", "Business Loan Program Temporary Changes; Paycheck Protection Program – Requirements – Promissory Notes, Authorizations, Affiliation, and Eligibility", "Treasury Releases Additional Guidance on PPP Loans Confirming Private Equity Firms and Hedge Funds Are Ineligible and Emphasizing Certification Requirements", "New rule means Watertown business owner may now qualify for Paycheck Protection loan", "Business Loan Program Temporary Changes; Paycheck Protection Program – Additional Eligibility Revisions to First Interim Final Rule", "Business Loan Program Temporary Changes; Paycheck Protection Program – Additional Eligibility Criteria and Requirements for Certain Pledges of Loans", "Ten Things We Need to Know About Paycheck Protection Program Forgiveness", "Top 4 FAQs About the Paycheck Protection Program", "New rule makes seasonal fishermen and crew members eligible for the Paycheck Protection Program", "Business Loan Program Temporary Changes; Paycheck Protection Program – Certain Eligible Payroll Costs", "Seasonal Employers Allowed to Pick Various 12 Week Periods for Computing Maximum PPP Loan Amount", "Firms with Trump links or worth $100 million got small business loans", "You Received a PPP Loan That Exceeds the Maximum Allowed — Now What? ). While a lender does not need to require a business to demonstrate the basis in its certification, the Small Business Administration may do so. An applicant may choose to use its payroll costs for the previous 12 calendar months instead. See How Much You Can Borrow** * Application begins January 12 2021 and ends at March 31, 2021. [98][99], The judge may affirm the Small Business Administration's decision, deny the Small Business Administration's decision, or remand the matter back to the Small Business Administration for additional consideration. While PPP funding was available to small businesses when it was first launched through the CARES Act, many businesses were left in the dark due to complications the first bill presented. [184], As part of the PPP loan forgiveness process, the Small Business Administration will send the questionnaire to the lender of each entity that received a PPP loan of $2 million or more. However, if you fail to submit a loan forgiveness application form, you’ll need to begin making payments within 10 months of the last day of your covered period. [55][56], Loan applications are only accepted, and loans may only be made, through August 8, 2020. Key Paycheck Protection Program Round 2 Updates Certain borrowers may be eligible for a “second-draw” PPP loan of up to $2 million. How to Apply for the Paycheck Protection Program: Determine if your business is eligible based on the eligibility requirements. A business may also disregard wage reductions if it eliminated the wage reduction by June 30, 2020. If the money is spent on payroll and other approved expenses, the PPP loan can convert to a grant that doesn't have to be paid back. [s][12], The amount of the PPP loan is based on the applicant's payroll costs. Remember, this is not official legal advice. Small business revenue standards are not used for qualification of PPP loans. ** Opens on an external … Senators Rob Portman (R–OH), Ben Cardin (D–MD), James Lankford (R–OK), and Cory Booker (D–NJ) introduced the PPP Second Chance Act to allow people with criminal records to apply for PPP loans for their small businesses. [90], For an owner-employee that owns more than 5% of either an S corporation or a C corporation, retirement plan contributions attributed to the owner are allowable and count toward PPP loan forgiveness, up to 20.833% of the owner's retirement plan contribution amount in 2019. Q: Can Independent Contractors and Self-Employed People Apply for the Paycheck Protection Program? [be][102] Between April 3 and April 16, 2020, there were 1.7 million loans made, and 4,975 lenders approved loans. After exhausting administrative remedies, a business may request judicial review in federal district court of the Small Business Administration's final decision. in order to be eligible for any type of forgiveness. [132], The Act also added to the types of allowable expenses of PPP loan proceeds. [181] The questionnaires ask about the entity's quarterly revenue, its capital expenditures, its dividend payments, whether it paid $250,000 or more of annualized compensation to any employee during the 24-week covered period, and to what extent its operations were altered due to COVID-19. hotels, bars, restaurants, etc. [82] At least 60% of the loan forgiveness amount must be for payroll costs, rather than 75%. … [30], The principal of a PPP loan will be either partially or fully forgiven under certain circumstances. Eligibility would be limited to self-employed individuals and businesses with 100 or fewer employees, and who have experienced a greater than a 50% decrease in revenue compared to recent quarter. Take a look at our Paycheck Protection Program infographic for a visual showing what is the PPP, what you can use funds for, who can apply, and how to apply. PPP loans of $150,000 and less would be disclosed in the aggregate. [117][119] Each local television, radio, and newspaper company would be eligible to apply separately, rather than together as an affiliated group, if they are otherwise eligible. [98][99], Under certain circumstances, a businesss that received a PPP loan is allowed to receive additional loan proceeds by way of a second draw.[100]. Start your PPP application. For a home-based business, rent, interest, and utilities are forgiveable up to the prorated share of covered expenses that were deductible on the business' tax return in 2019. [82] Loan forgiveness will not decrease if the business was unable to rehire its employees on February 15 and is unable to hire similarly qualified employees by December 31. Utilities are allowable if service began prior to February 15, 2020. Additionally, it may receive forgiveness for an amount of non-payroll costs up to 66.67% of the amount it spent on payroll costs. The business is unable to return to its previous level of business activity due to compliance with requirements or guidance from the. Businesses can use the loan amount for a chosen covered period of 8 to 24 weeks after the loan request is fulfilled. Apply now. [85][40], The compensation of an owner-employee of at least 5% of the C corporation is allowable and limited to the amount of their 2019 employee cash compensation, employer retirement contributions on their behalf, and health insurance contributions on their behalf. The guidance addressed issues regarding the submission process; employee, independent contractor and sole proprietor compensation; non-payroll costs and payroll cycle calculations.
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